MassMutual and Investnet firm positions in Managed Investments
The announcement by MassMutual of a collaboration with Envestnet Retirement Solutions has potentially significant ramifications for the DC industry and may be the first step towards true customization of DC participant investments.
Data to help customize and change a participant’s investment portfolio is available on record keeping platforms such as age, deferral rates, account balance, investment selection and access to a DB plan. Russell Investments and Next Technology developed similar technology with the Adaptive Retirement Account solution but they lacked one critical element – data from record keepers. Many record keepers are reluctant to share it; others have proprietary investment motives; while others are tied to high revenue sharing funds.
By teaming with an independent firm like Envestnet which has a dominant position in the TAMP market using the plans underlying funds selected mostly by an independent plan advisor, MassMutual might have the formula that gets participants closer to successful outcomes while potentially limiting plan sponsor fiduciary liability. Interestingly, MassMutual moved from Mesirow, which provided fiduciary oversight of funds, to Envestnet going from using a third party that provides protection against liability to one that actively seeks to improve outcomes.
There’s more to come by bringing in a participant’s outside assets which Envestnet hopes to do through their acquisition of Yodlee as well as consolidation of all retirement accounts but the MassMutual/Envestnet collaboration is significant. It also provides some hope to long only active equity managers who do not have a viable target data fund strategy.
http://www.401khelpcenter.com/press_2015/pr_massmutual_092915.html#.VhFt9N9Viko
